Kelloggs Has its Worst Trading Day in Almost Two Decades

Shares of Kelloggs were plummeting in Wednesday’s trading session after the company reported third quarter results and cut its 2018 outlook. Shares were down as much as 9.6%, its biggest daily drop since 1998.

For the quarter, net income saw a growth from $288 million, or 83 cents, to $380 million, or $1.09 a share. Excluding certain one-time items, earnings were $1.06 per share, which was inline with expectations. Revenue at $3.47 billion was also ahead of the $3.42 billion that was expected.

The company has been spending more money on advertising as well as promotions to help drive the sales of its cereals.

Looking ahead, the company is expecting full-year adjusted earnings to see a growth of 7 to 8%. Previously the company had forecast 11 to 13%. Operating profit was cut from a 5 to 7% increase to now being flat.

“The single hardest thing to do in consumer packaged goods is return to top-line growth,” said Steve Cahillane, CEO.

“Could we have pulled back on some investment in Q3 and delivered more profit?” he said. “Yes, of course. But we are leaning into investment right now.”

He also said on the call, “Q3 was another quarter of good progress under Deploy for Growth. We said we would increase our investment in brands and capabilities, and we did. We continued to improve consumption trends worldwide across most of our categories in the United States and in other developed markets around the world. We sustain our accelerated organic growth rate in our emerging markets and we continue to expand distribution and consumption for single-serve pack formats, which are outpacing our categories.”

Disclaimer: We have no position in Kellogg Company (NYSE: K) and have not been compensated for this article.